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UK Mobile Network Operators face a Cap on Spectrum

The UK telecoms regulator, Ofcom, has announced an overall cap on the amount of spectrum that a mobile network operator can control in advance of the planned autumn spectrum auctions. These restrictions have been imposed to reflect market developments and to safeguard competition in the industry. The reserve price on the auction is £70m but as with previous auctions, the proceeds are likely to be considerably higher. 40 MHz of spectrum in the 2.3 GHz band will be auctioned allowing the successful bidders to increase capacity in existing 4G networks. In addition, 150 MHz of spectrum in the 3.4 GHz band will be auctioned for future deployment of 5G mobile networks. There are two different restrictions imposed on bidders for the forthcoming auction. Firstly, Ofcom have capped at 255MHz the amount of "immediately usable" spectrum that any one operator can hold following the auction. This means that certain of the UK incumbent mobile providers will not be able to bid for spectrum in specific bands or be limited in the amount of additional Spectrum they can acquire. Secondly, Ofcom have created a new, additional cap of 340 MHz on the overall amount of mobile spectrum a single operator can hold as a result of the auction. The new cap imposes a limit of 37% of all the mobile spectrum anticipated to be useable in 2020. The Ofcom press release, including a helpful chart showing the available quantity of spectrum and the impact of the caps on the existing UK networks, is available here.